Cheapskate to Spendypants in FIRE?

[FIREstache]

Have any of you FIREd folks been super frugal while working, perhaps a tightwad or cheapskate, and then opened the purse strings wide for experiences after you FIRE?

I'm not talking about wasting money or buying a bunch of useless commercial crap, but increasing your discretionary spending by a significant multiple, perhaps 10X or more, after you FIREd for entertainment, travel, etc. to bring rich experiences to your FIRE life that you weren't participating in much (if at all) while working.

I'm asking because I've always been pretty frugal by not eating out much or vacationing and such, and my discretionary spending has always been very low, less than $1000/yr in recent years (which includes eating out) while saving closer to 80% of my take home pay.  Instead of feeling like I was going without, there was a feeling of satisfaction to spend that little while saving.  But I've written into my FIRE budget that I'll have $25K/yr discretionary based on a 3.5% SWR.  Bump that up to 4% SWR, and that would make it $30K/yr discretionary, about 30X what my discretionary spending has been in recent years.

I've mentioned this plan online and IRL, and I've had some responses from people stating that they didn't think I would end up spending that much.  I admit, it's a paradigm shift for me, but then, so is FIRE.  I'm 54, so I'm feeling it's about time to start reaping the benefits of what I've saved while I'm still healthy and have the energy and motivation to do.  I just wondered if anyone else has made such a big shift in discretionary spending after they FIREd.

[Kris]

I haven't, but I don't see anything wrong with it at all if you have the money.

DH has only been RE for three months (and I make money writing, so I'm not retired, but I have basically engineered my life to live on my own terms and I feel pretty retired a lot of the time), and I can tell that our shift is basically happening in two directions: one, simpler life (fewer possessions, enjoying being home and in our neighborhood, "living" instead of "buying"); and two, less frequent but longer travel (i.e., instead of two trips a year, maybe one trip but for 1-3 months instead of 4-5 days).

We're spending less, but our it's seeming to happen fairly naturally. We're just not in an accumulation phase of our lives anymore. We're happy using the things we have, and get a lot of satisfaction out of having a paid-off house, no car note, and nothing much that we need.

[MonkeyJenga]

One of the great things that happened when I started seriously pursuing FIRE is that I had to get creative with my hobbies and social life. I found that I was missing out on a lot of cool stuff by doing the default bars and restaurants of a 20-something in NYC. I discovered lecture series, free comedy shows, started exploring the city more on foot, hosting potlucks, drawing, volunteering.

I cannot imagine putting tens of thousands of dollars toward discretionary spending. My entire annual budget, aside from healthcare, is $20k. I did bump up my entertainment budget (from basically zero) so I can go see shows sometimes and get to know my new city. I could travel more luxuriously, but that doesn't have a big impact on my happiness. I could eat out more often, but I usually overeat at restaurants and feel sick afterward. I don't care about fancy clothes or kitchenware or cars. Not sure what else I would want to spend money on. Maybe camera lenses. That could eat up a lot of money if I let it, actually.

[ysette9]

As a kid I remember strongly how my aunt and uncle were super frugal. Cheap even. They were the intimate mustachian two decades before it was a thing. Part of it was my grandparents’ focus on saving and part of it was losing everything when the Panama Canal Zone got handed back over to the Panamanians and the banks got nationalized, screwing over all of the foreigners that had been using them. They had to start over in their early 30s with nothing.

Anyway, they saved and scrimped and invested and paid the mortgage off early and retired early. Today they live in a McMansion and drinks Starbucks all the time and drive a million miles a year and cruise internationally all the time and appear to be loving life. They also are living within their retirement income and seem to be widely having Vanguard manage their retirement investments for them. So.... who am I to judge what makes them happy, even if it does seem to be a pretty big change in philosophy?

[FIREstache]

I cannot imagine putting tens of thousands of dollars toward discretionary spending. My entire annual budget, aside from healthcare, is $20k.

When I look at $25K to $30K per year for discretionary spending as a single person, I feel the same way - hard to imagine spending that much.  My FIRE budget for all the necessities is closer to $20K (details in my case study).  And I've been spending $500 to $1000 most years on discretionary spending.  But when I break that $25K down to monthly, $2K per month doesn't sounds like so much when you're planning to travel (I've seen the figures that people have posted for their traveling expenses).  I haven't done any real traveling outside of work in years, so I'm looking forward to having the time to do it, but I'm not sure how much it will improve my happiness, or if I'll get it out of my system after some early FIRE traveling, or if I'll develop an appetite to do more of it year after year.  So, that makes it a big variable.

[MonkeyJenga]

I cannot imagine putting tens of thousands of dollars toward discretionary spending. My entire annual budget, aside from healthcare, is $20k.

When I look at $25K to $30K per year for discretionary spending as a single person, I feel the same way - hard to imagine spending that much.  My FIRE budget for all the necessities is closer to $20K (details in my case study).  And I've been spending $500 to $1000 most years on discretionary spending.  But when I break that $25K down to monthly, $2K per month doesn't sounds like so much when you're planning to travel (I've seen the figures that people have posted for their traveling expenses).  I haven't done any real traveling outside of work in years, so I'm looking forward to having the time to do it, but I'm not sure how much it will improve my happiness, or if I'll get it out of my system after some early FIRE traveling, or if I'll develop an appetite to do more of it year after year.  So, that makes it a big variable.

If you're retired and can slow travel, it doesn't need to be that much more expensive than regular life. If you're adding it on top of keeping your regular home, then you're essentially paying for two homes. What are you doing with your primary residence while you travel?

It sounds like you've already saved up the money to cover this, so it doesn't really matter. Either you'll spend it or you won't. You've got a lot of options.

[secondcor521]

I haven't known anyone who has done that, but if you've got reasons for your plan being that way, I think it could work.

I will say that I currently have the opposite problem.  According to what I personally consider safe, I could be spending about three times what I am currently spending.  Since about 90% of my current expenditures are what you might consider non-discretionary (food, insurance, taxes, utilities, etc.), tripling my overall budget would multiply my discretionary expenses by about 20x.

I'm having a hard time doing it.  Spending just for spending's sake seems wasteful.  Spending on anything more than what I normally do seems either unnecessary or indulgent, and I can only indulge so much before I feel "full".  To make a food analogy, a bite of tiramisu is great, and a serving of tiramisu is good, but I wouldn't eat five of them for dessert.  And if I did eat five, I'd probably lay off for a week, which would result in a pretty low "tiramisus per day" rate.

So I think you may have a hard time actually doing it when the time comes unless you have very specific plans for what that 30x is going to do for you.  You may want to consider retiring earlier or donating more or considering the extra money to be super-duper extra safety factor.

[deborah]

I was never going overseas when I retired - there is an enormous amount to see and do in Australia, that I’ve never done, and my default form of travel means I spend about the same whether I travel or not.

But, enticements came my way. There are meetups in far flung places. My parents are old and frail, so I spend most of my life driving 7.5 hours to their place, staying for about a week and coming back. I’ve done that eight times so far this year, and to ensure I get a break, the only thing is to travel to far flung places. Otherwise, I would feel compelled to break off my meanderings and go to them if there was need.

If you go to far flung places from Australia, you need to go for a while to justify the lengthy plane trips.

So I now go on long trips to far flung places, and spend vast amounts more on discretionary things than I used to. I am not putting my retirement at risk, as I worked much longer than I should have, and my stash is still growing.

[FIREstache]

I cannot imagine putting tens of thousands of dollars toward discretionary spending. My entire annual budget, aside from healthcare, is $20k.

When I look at $25K to $30K per year for discretionary spending as a single person, I feel the same way - hard to imagine spending that much.  My FIRE budget for all the necessities is closer to $20K (details in my case study).  And I've been spending $500 to $1000 most years on discretionary spending.  But when I break that $25K down to monthly, $2K per month doesn't sounds like so much when you're planning to travel (I've seen the figures that people have posted for their traveling expenses).  I haven't done any real traveling outside of work in years, so I'm looking forward to having the time to do it, but I'm not sure how much it will improve my happiness, or if I'll get it out of my system after some early FIRE traveling, or if I'll develop an appetite to do more of it year after year.  So, that makes it a big variable.

If you're retired and can slow travel, it doesn't need to be that much more expensive than regular life. If you're adding it on top of keeping your regular home, then you're essentially paying for two homes. What are you doing with your primary residence while you travel?

My primary residence costs me about $20/day to maintain.  I might travel for weeks at a time, but probably less than 2 months usually.  I am not planning on full time travel, so I still need my home to come home to.

It sounds like you've already saved up the money to cover this, so it doesn't really matter. Either you'll spend it or you won't. You've got a lot of options.

Yes, $25K/yr on total discretionary would fit comfortably in the budget with a 3.5% SWR.   But it would still be a big change for me to actually spend that, which is why I was asking if anyone else has done it after being very frugal prior to that.

[FIREstache]

I haven't known anyone who has done that, but if you've got reasons for your plan being that way, I think it could work.

I will say that I currently have the opposite problem.  According to what I personally consider safe, I could be spending about three times what I am currently spending.  Since about 90% of my current expenditures are what you might consider non-discretionary (food, insurance, taxes, utilities, etc.), tripling my overall budget would multiply my discretionary expenses by about 20x.

I'm having a hard time doing it.  Spending just for spending's sake seems wasteful.  Spending on anything more than what I normally do seems either unnecessary or indulgent, and I can only indulge so much before I feel "full".

Yeah, I'm not wanting to spend just for spending's sake or to be wasteful.  I mentioned that in my first post.  This would be to enrich FIRE with actual experiences that I have been holding off on during my working career.  It's something I've looked forward to, but maybe I'll have a hard time carrying through when the times comes, as you mentioned.

[FIREstache]

I was never going overseas when I retired - there is an enormous amount to see and do in Australia, that I’ve never done, and my default form of travel means I spend about the same whether I travel or not.

But, enticements came my way. There are meetups in far flung places. My parents are old and frail, so I spend most of my life driving 7.5 hours to their place, staying for about a week and coming back. I’ve done that eight times so far this year, and to ensure I get a break, the only thing is to travel to far flung places. Otherwise, I would feel compelled to break off my meanderings and go to them if there was need.

If you go to far flung places from Australia, you need to go for a while to justify the lengthy plane trips.

So I now go on long trips to far flung places, and spend vast amounts more on discretionary things than I used to. I am not putting my retirement at risk, as I worked much longer than I should have, and my stash is still growing.

That sounds close to what I'm talking about if you were pretty frugal early on, although my high discretionary spend is planned from the first year that I FIRE.  I figured I would start by taking some shorter trips closer to home and work my way up to some longer distance and extended trips here in the U.S.  After some of that, maybe I would want to travel overseas.  Or, I might not want to, or I might lose interest in traveling, altogether.  Without traveling, I don't think I would keep spending anywhere near what my discretionary budget allows.

[Moustachienne]

One of the great things that happened when I started seriously pursuing FIRE is that I had to get creative with my hobbies and social life. I found that I was missing out on a lot of cool stuff by doing the default bars and restaurants of a 20-something in NYC. I discovered lecture series, free comedy shows, started exploring the city more on foot, hosting potlucks, drawing, volunteering.
...

I absolutely agree that this hobby and social creativity is one of the great things about a "frugal" mindset, at whatever spending level.  Now that I'm FIR, I am spending a bit more on fun activities (it's all fun!) like courses, concerts, swimming, etc., because now I have the time to do these things. They were always in the plan. But I still get a huge amount of pleasure from the things MonkeyJenga lists, both at home and when we travel.  I'd also add that even though we can well afford to be more fancy pants (and sometimes are) both DH and I most enjoy things like discovering a modest family-run motel that's clean and comfortable or excellent food at an unassuming local restaurant or the great mountain and harbour views from a non-fancy neighbourhood. Searching out these experiences is as much fun or more that just putting down the $$ for a luxury experience. 

Just before and just after FIR I wondered how we would switch from a saving to spending mindset.  Would we spend too much? Would we spend too little?  How to make spending wisely as big and as fun of a goal as saving wisely was?   Would we get whiplash from the 180 degree turn?   As it's turned out, no!  Our values are consistent and we are spending well.  Sounds like many FIREees are the same.

[Mr. Green]

I suppose I could make the argument that we fall into this category. Pre-FIRE, less than 10% of our annual spending was on entertainment and travel. Now over 50% of our spending is since we're travelling long term.

[FIREstache]

I suppose I could make the argument that we fall into this category. Pre-FIRE, less than 10% of our annual spending was on entertainment and travel. Now over 50% of our spending is since we're travelling long term.

That's a pretty big increase, and I assume that your total spending is higher as well.  My projected fire budget is 240% of my pre-FIRE budget, partly due to healthcare coveage costs, but mostly due to the large increase in discretionary spending, which had been $400 to $1K in recent years, and now I've got it tagged for $25K to $30K.  If I end up not spending that much, then I'll just have more padding in the stash.

[Mr. Green]

I suppose I could make the argument that we fall into this category. Pre-FIRE, less than 10% of our annual spending was on entertainment and travel. Now over 50% of our spending is since we're travelling long term.

That's a pretty big increase, and I assume that your total spending is higher as well.  My projected fire budget is 240% of my pre-FIRE budget, partly due to healthcare coveage costs, but mostly due to the large increase in discretionary spending, which had been $400 to $1K in recent years, and now I've got it tagged for $25K to $30K.  If I end up not spending that much, then I'll just have more padding in the stash.

Our spending has gone down a little because we moved out of our house and have tenants covering the mortgage. Outside of that expense I'd say our budget pre- and post-FIRE are the same.

[FIREstache]

My discretionary spending, while low over all, is approx 50% to 75% of my total spending.  Much higher percentage since FIREing and most of it to travel and activity related things. However my base expenses were very low and my total monthly spend on an annual average for everything - base expenses and discretionary - is approx $1500/ month. Since I prefer to travel in a longer term lump once or twice a year for a few months at a time, and I travel very cheaply,  my monthly spending fluxuates depending if I'm at home or away. Some months when I'm at home I  may spend a few hundred, other months when travelling a couple of thousand. Like the OP I had a low expenses paid off house when I FIREd and inexpensive medical and no debt. So my only "at home" expenses were food and minimal car expenses.

You mentioned traveling very cheaply and spending a "couple of thousand" while traveling.  Is the $2K just for discretionary spending or your whole budget on those traveling months?   That's about what I'm budgeting for discretionary.  I didn't think I would travel too cheaply, although I don't want to be wasteful, either.  I'm not the type to go out camping by myself or sleeping in a vehicle, so I'm going to get hotels or Airbnb, for example.

[FIREstache]

Spartana, that's pretty impressive that your figure includes all of your spending.  I consider my spending to be pretty low, but it's probably going be over $20,000/yr when I FIRE just for all of the required expenses on average, and that's without including any discretionary, so my actual spending will be a little further north of that, even if I end up not traveling much.  My housing and car including my new car fund exceed half that amount.  I think I would have to sell my house and live in a van down by the river to get down to a total spending level equal to you.  :)

[Mr. Green]

I have to say, I'm amazed at how cheaply you can live if you're into vanlife. We're out here in Moab, UT and we've seen fee camping sites all over the place. Pop into town for services, showers, etc. It would be easy to live on less than $10,000 a year.

[kei te pai]

My biggest increase in spending Post FIRE has been charity and gifts. I enjoy feeling free to give more, and have little desire for anything more for myself.

[soccerluvof4]

I have to say, I'm amazed at how cheaply you can live if you're into vanlife. We're out here in Moab, UT and we've seen fee camping sites all over the place. Pop into town for services, showers, etc. It would be easy to live on less than $10,000 a year.

I see your from Wilmington. I spent a lot of time in Asheville and whenever there like anywhere I always go to the Ymca to get a workout in. Being FIre'd later though down the line when the other two are out of the house I want to do exactly that live mostly out of a van or something similar. What I was getting at though is at the Ymca's everyday I saw several people living in Vans and using the Ymca for workouts , showers etc.. Dollar for dollar I think thats a pretty good way to go.

[Mr. Green]

I have to say, I'm amazed at how cheaply you can live if you're into vanlife. We're out here in Moab, UT and we've seen fee camping sites all over the place. Pop into town for services, showers, etc. It would be easy to live on less than $10,000 a year.

I see your from Wilmington. I spent a lot of time in Asheville and whenever there like anywhere I always go to the Ymca to get a workout in. Being FIre'd later though down the line when the other two are out of the house I want to do exactly that live mostly out of a van or something similar. What I was getting at though is at the Ymca's everyday I saw several people living in Vans and using the Ymca for workouts , showers etc.. Dollar for dollar I think thats a pretty good way to go.

I bet! I've heard similar stories about Planet Fitness. They're nationwide and $20 a month gets you access to showers and workout equipment. While less robust than a YMCA, not a bad deal for someone moving around. Though I've found that many of the park/monument areas in northern Arizona and southern Utah are so far away from everything that I doubt there's even a Planet Fitness nearby.

[FIREstache]

So, driving a van would use more gas than my car.  To cut costs, I would have to sleep in it and avoid those hotel and Airbnb costs, which add up!

Regarding increased discretionary spending in FIRE based on my tentative budget, I got to thinking how back in December, I decided that I would not FIRE in 2019 but that I would allow myself to spend a little more freely on discretionary spending since I was going to work an extra year.  Well, we've completed 4 months of the year, and I haven't increased my discretionary spending at all.  I haven't even had any desire to spend any more.  In fact, I'm spending even less than last year on discretionary spending to this point.  Of course, the big difference with FIRE is that I will have a lot more free time.

[Dicey]

Yup...mostly philanthropically. Where I used to give more time than money, post-FIRE, I have the luxury of doing both, which I quite enjoy.

[Trudie]

I found that during our post-fire move we spent a lot of money on eating out and furnishing our new, smaller condo.  On the other hand, our new home is completely paid for and much more energy efficient.  Things are stabilizing from our move and I can already tell that we're going to have a hard time spending 4 percent.

[JSMustachian]

Our current spending is $24,000 a year if you take out the expenses we won't have once we are in retirement (mortgage, daycare, work related expenses). We plan on doubling that so it will be a huge increase in discretionary spending. We would definitely like to eat out more and travel more but are tightening our spending to keep our savings rate high for now.

We might not spend all of that money in retirement but that is what we are planning for. If that money is not spent it will at least provide some safety for unexpected expenses down the road. 

[Rosy]

Come January 2020 I will have exactly this problem. Strangely enough, I am a little lost.
So I made a plan to save/invest half of it since I couldn't come up with anything that I wanted to have or do immediately and it would be great to continue to grow the stash, because I can - without scrimping or saving.
Sure there are things/experiences/travel that I am interested in, but pretty much all of it requires a big chunk of money.

So I decided to coast a while and see how it works out with me possibly spending half, about $1K a month and permanently save the other $1K.
However - spending $1K still seems like a bad?:) idea, so perhaps I'll save $500 of it in a dedicated travel fund or put it away for that Italian gold necklace that I promised myself as a reward once upon a time for whenever I reached this point in my financial life.

Basically, I spent about $100 mo in the past - so jumping to $1K really is 10x that amount and spending $2K seems positively wasteful. I'm excited about being in this position in the first place, but I can be a big spontaneous spender and I am a little nervous about what I might do on a whim.
We'll see how it goes, (we have enough EF and slush money in separate accounts - so nothing is going to blow up in our face).

Then again, if I have to save up for a big discretionary spending item doesn't that mean that I don't have enough money?
That I should have set up a permanent fun-discretionary account? Ugh - this MMM saving crap never ends...
I'm just gonna go rogue in 2020 and stay far away from this board.
... and, I may just blow every penny of my SS for a while .....

[bluebelle]

we will have a higher discretionary $ amount in our retirement budget, particularly for the first 10-15 years.   We are moving to a lakefront home as part of our retirement, so we know we'll have extra costs the first few years - boat, dock, snowmobiles, landscaping.....plus some travel.....I like the idea of treating all of this as discretionary because it builds alot of cushion into our retirement plan....market tanks - don't travel, ride out the downturn at a lower spend (that is still pretty fluffy).    We're retiring at 56/55, so we plan to do most of our out of province travelling in the first 10 years, as out of province travel insurance will be much cheaper then.   

[Rosy]

@spartana - I think the root of my current frustration, if you can call it that, is that I thought having an extra 2K mo just for discretionary was pretty good.
 Now that I'm essentially there, it is and it isn't.

I haven't put my life on hold as far as travel or other things that matter to me, because I am already out of time and my accumulation phase is over - sort of.
I'm 70 but Mr. R. is only 58, so while I'm im-patiently:) waiting for him to finally retire in three years, I don't have a crystal ball and worry about how my energy and health will be by then.
So I/we chose to live now and travel now but I also saved between 50% to 75%, which is one reason it took me so long to reach my end game - Jan 2020.
 
I agree with you that travel doesn't have to be expensive. I am quite creative in finding ways to finance my travels. My favorite ways incl things like medical tourism for treatments or elective surgery that my rather excellent health insurance still will not cover or picking up meds that are sky high in the US for a friend, purchasing luxury items or electronics to sell for a profit, even sold my travel pics, travel articles for $350 that was an unexpected bonus.
Years ago, I paid my apartment rent a time or two with alcohol thanks to my military ID and a taxi driver I knew who acted as distributor.

Last summer I took a two-month bucket list trip to Europe. The flight covered via points/bonus, saved about 2-3K in medical expenses while there and brought back about six bras that would have cost me 4 times as much in the US and had some jewelry work done that cost me half of what it would be in the US.
Staying partially with friends further brought down the cost - so yeah, I can dream up a thing or two.

My GF picked up a trunkful of "designer" clothing from Spain while on vacation, then gave a big red carpet:) fashion show party at her home. Complete with Models (friends) and lots of Sangrias of course. An enterprising young seamstress in a little village in Spain and a clever, but poor lady with lots of fashionable friends in Germany - stuff like this is what makes the world go round:).

I laughed when I saw the first article about how meds mfg other than in the US were dangerous. How stupid do they think the American public is. As if places like Germany and Canada don't have their own FDA. Sheesh. Glad to see our governor actually proposed a bill to buy drugs for Floridians - imported from Canada.
That's what I like about this forum, people are smart and take advantage of every opportunity to get what they want out of life.

Sorry, I digressed.
Bottom line, I have $2K in discretionary funds coming in each month. I am totally thrilled with that because in all truth that is more than enough for me and probably even for us. It gives us leeway and the occasional luxury.
The trouble is, I'm whining and stomping my feet because the OP and the posts in this thread made me realize I might also "need"?:) a dedicated $10K-$15K discretionary fun account. 

Damn, I thought I was done.
Upon reflection, I'm still waffling between saving $500 for this new goal ugh ugh ugh or sticking with the plan of $1K and blowing the rest.
Right now "blow it" is winning - we'll see how I feel about that in a few months, maybe my creative financial shenanigans will save the day.

Spartana, I've always been impressed with how you FIRED, how you think and operate and how Spartan you are:). We are all wired differently and while I've had to live on $10K one year I absolutely positively hated it, but I am perfectly fine living on $40K a year. $80-$85K for the both of us - works for us.
... and no, I'm not giving up on travel, we recently returned from a week trip to Canada, Niagara Falls, NY - the Falls were a spectacular once in a lifetime experience and yes, of course, we found ways to mitigate the cost.

We happen to live in tourist Mecca, just 30 minutes away from the best white sand beaches in the country, the Int'l Airport, not to mention all the entertainment/sports/exhibits/museums/art scene/music/restaurants and endless outdoor activities that we are surrounded by.
So where do I want to travel next?:) - I want to see the leaves change, walk in the woods, breathe in pine scents (no swamp, no palm tree, no heat, no alligators) pick apples by the bucket full to bring home and stay in a cabin overlooking a lake in mountain country (one tires of the endless flatness of Florida) ...

My apologies for hijacking this thread - I'll shut up now.
Peace out.
   

[jim555]

My plan was spend low in the front years and pick up spending as time goes on.  So I am starting to spend more now.  I find it difficult to spend since frugal mode is hard to break.  Spending just to spend doesn't do anything for me.  Even if I do spend I want to get a deal and there better be a good reason for the spending in the first place.  "Blow that dough" mode is harder than I thought.

[Rosy]

My plan was spend low in the front years and pick up spending as time goes on.  So I am starting to spend more now.  I find it difficult to spend since frugal mode is hard to break.  Spending just to spend doesn't do anything for me.  Even if I do spend I want to get a deal and there better be a good reason for the spending in the first place.  "Blow that dough" mode is harder than I thought.

Amen, brother.....

[Dicey]

Rosy, that was an awesome digression!

[Cassie]

We are spending more on travel, experiences and eating out but don’t spend much on clothes, cars or hiring things out.  We travel in the off season because we hate big crowds.